Brokers
Now you are reading
The best Forex broker without swap (swap free) - List 2024
0

The best Forex broker without swap (swap free) - List 2024

created Forex ClubJuly 1 2023

Forex broker without swap is often sought after "unicorn" among traders. Although swap points seem to be an integral part of trading on Forex market and CFD instruments, for many investors they are an obstacle to the effective implementation of their strategies. Are there brokers on the market that allow swap-free trading? We checked it.

What is swap

Let's start briefly with what a swap is and what its size depends on. Simply put, this is it the interest rate on the loan we take out on the market and our broker. On the leveraged market, which is Forex, thanks to financial leverage, we trade with more capital than we have. In other words, by committing, for example, $1000 per position, our exposure could be $30. Depending on the selected instrument, position direction and interest rate differential, swap points can be both positive (revenue) and negative (cost).

Swaps are charged every day at 23:00 CET, which means that as long as we have an open position, swaps will be credited to our balance. This is why swaps happen to be extremely undesirable for long-term traders.


MUST READ: Swaps without secrets - everything you need to know about swaps


What if interest rates are the same in both countries? You'd think they would balance out and the swap would be zero. Nothing could be more wrong. Brokers are not charities, that's why they add their margin to the swaps, which, apart from the spread or commission, constitutes their additional income. This means that positive swaps are reduced and negative swaps are increased by this margin.

Additionally, Forex is a decentralized market, so there is no top-down standardization and schedules for updating swap points (and allowed margin levels that brokers might impose). This means that at the same time swaps can differ between two brokers on the same instruments. But will we find offers where there are no swaps at all?

Ways to avoid swaps

The margin added to the swap is an additional profit for the broker, but the swaps themselves are a market element, so resigning from them is a cost that the broker must bear. Therefore, we will not find too many options where this swap actually does not exist. However, there are a few exceptions.

Swap free accounts (Islamic Accounts)

Islamic accountscommonly known as swap free accounts, is an option prepared for people who profess Islam. Sharia law forbids charging interest as it is usurious conduct. Swaps are interpreted as interest, therefore, so that Muslims can use the services of Forex brokers, dedicated types of accounts have been prepared. However, instead of swaps, brokers often introduce the so-called administration feewhich is charged regularly for using the account. Additionally, companies often take steps to ensure that a customer applying for an Islamic account is actually a Muslim.

Most international brokers offer Islamic accounts. These are e.g. IC Trading or eToro.

CFDs based on futures

CFDs, which are based on futures, sometimes have no swap points. However, this does not mean that there are no fees. Settlement takes place on the day of the rollover of the series of the future contract on which the CFD instrument is based. The settlement results from exchange rate differences between the current series of the contract and the new one. This means that we are dealing with a swap but in a different form and we are charged with it much less often.

The best swap free broker

However, you can find an offer on the market where the broker consciously resigns from charging swaps and takes on the cost of financing the position to stand out from the competition. It is such an example OANDA TMS Brokers, which resigned from calculating swap points on selected instruments from the category of commodities and stock market indices (details in the table).

By registering on the Forex Club website, you will receive access to all benefits - Check the list

Best Swap Free Broker - 2024

oanda tms brokers logo
Country Poland, USA
Min. Deposit None
The model of order fulfillment Market Maker
Leverage Retail customer - 1:30
Experienced customer - 1:100
Professional client - 1:200
Tool MT5, Trading View
Swap-free instruments Index CFDs: S&P 500, Dow Jones 30, Nasdaq 100, DAX 40, WIG 20
Commodity CFDs: Petroleum, Natural Gas, Cocoa, Coffee, Sugar, Wheat, Palladium, Platinum
CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 68% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.

OANDA TMS Brokers

TMS Brokers is the oldest Forex broker on the Polish market. From 2020, it became part of the OANDA capital group, creating OANDA TMS Brokers. Since then, the development of the company has dynamically accelerated. This resulted in the creation of a very competitive offer, which stands out from the market competition above all no swap points on selected instruments. But it is not everything. We also have proven solutions at our disposal in the form of the MetaTrader 5 i platform account integration with Trading View, over 3000 instruments with very attractive spreads.

Who is the swap important for?

You have to remember that swaps can be both our cost and additional income, therefore, they cannot be directly classified as something undesirable. In some situations, they can actually interfere, e.g. trading CFDs on instruments other than currencies, where regardless of the direction of our position, swaps are often negative in both directions.

On the surface, it may also seem that the swap is just that "little" however, it is charged daily. This means that when trading in the long term, where we hold an open position for weeks or even months, it may happen that unfavorable swap conditions will absorb a large part of the profits earned or will noticeably deepen the recorded loss.

Another negative scenario is trading in the short term with high leverage. If we open positions with a significant volume and use the capital in our account to a large extent, then each nightly rollover of positions can be very costly for us. Therefore, it is always worth getting acquainted with the specification of our broker's financial instruments before starting to trade.

What do you think?
I like it
20%
Interesting
80%
Heh ...
0%
Shock!
0%
I do not like
0%
Detriment
0%
About the Author
Forex Club
Forex Club is one of the largest and oldest Polish investment portals - forex and trading tools. It is an original project launched in 2008 and a recognizable brand focused on the currency market.